Econometrics And Econometricians December 01, 2021

Revenue curves under Different markets

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Broadly markets are of three types as follows: 1. Perfectly competitive market 2.Monopoly market 3.Monopolistic competitive market 1.Revenue curve under perfectly competitive market or Perfect competition: Under perfect competition, a firm is a price taker. It cannot influence /change the market price. AR and MR curve 2. Revenue Curve Under Monopoly: A monopolist is a price maker. He is the single seller of the product in the market. Under monopoly, however, if a firm desires to sell more , he has to reduce price of the product. Thus, there is  negative relationship  between price of the product na ddemand for the product in a monopoly market. Accordingly, a Firm’s AR curve (or the demand curve or the priice line) slopes downaward.  3. Revenue Curve Under Monopolistic Competition: In a Monopolistic Competitive market, producers sell “differentiated product” which means products whose close substitutes are easily available in the market. Under Monopolistic Compet...
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Theory of Demand

Demand for a commodity is the desire, ability and willingness to pay for a commodity at a given point of time or during a period of time.   

Difference between Demand and Quantity Demanded

Demand: Demand refers to different possible quantities of a commodity that the consumer is ready to buy at different possible prices of that commodity.

For example, demand for commodity-X refers to say 10 units of X if price of X is Rs. 5 per unit, 8 unit of X if price of X is Rs. 6 per unit, 6 units of X if price of X is Rs. 7 per unit and so on.

Quantity Demanded: Quantity demanded refers to a specific quantity to be purchased against a specific price of the commodity.

For example, quantity demanded of commodity-X refers to say 8 units of X if price of X happens to be Rs. 6 per unit.   


Demand Schedule

According to Professor Paul Samuelson, “The table relating to price and quantity demanded is called the demand schedule.”

Demand Schedules are of the following two categories:

(1) Individual Demand or Individual Demand Schedule: It is a table showing different quantities of a commodity that one particular buyer/ consumer in the market is ready to buy at different possible prices of the commodity at a point of time.

(2) Market Demand or Market Demand Schedule: It is a table showing different quantities of a commodity that all the buyers/consumers in the market are ready to buy at different possible prices of the commodity at a point of time.

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